Manufacturers have the aim of reaching out to customers and consumers. They have products that they need to supply. They have to develop a distribution channel to reach the end-users of their products. The markets have changed because of competition. Thus, organizations have had to employ as many distribution channels as possible. A majority of the companies have adopted the hybrid distribution channel as the best option for selling their products and services.
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A hybrid distribution channel is an arrangement where a firm has multiple systems or channels for delivering goods and services to the end-users (Dent 252). The channels may have a central location of authority or may be left to the channel members to decide the best option. The channels have to satisfy the needs of the diverse market segments (Thakran and Verma 132).
The main reason for the increased distribution channel is the desire to increase market share and reduce costs. The multichannel system enables firms to adapt to changing customer needs. They also get acquainted with the consumers shopping patterns. A single channel may not be useful to a company that has a range of products (Kotler and Armstrong 312). The firm has to apply the hybrid distribution channel.
Some companies have manufacturing trends that exceed their current distribution channel. When the existing outlets are saturated, the company can use the extra channels to sell its products. Additional channels enable the manufacturer to segment the market accordingly. It can then focus its energies on particular sections and improve its competitiveness (Lu and Xie 506).
In the hybrid distribution system, combinations of distinct channels perform the distribution tasks. The channels have to meet the needs of different market segments. They deliver product variations. For instance, several channels may target one market segment. It increases the chances of selling a product because of the different channels. The mobile, internet, and store channels may target a segment, and each of them makes sales that would have otherwise not sold if there was only one channel. The internet has become one of the most simplified ways of reaching out to customers through very many gadgets and different channels (Kotler 365).
Management of the hybrid functions is usually within the firm to groups of individuals or coalitions. They are formally or informally part of a particular distribution. It creates harmony amongst marketers.
Hybrid channels create conflicts within the organization. The channels may put pressure on the scarce resources available in the company. The capital, personnel, and products may not be readily available to suffice the needs of the channel demands. The channels may also develop conflicting objectives and hence begin focusing on internal squabbles (Kotler 365). It may leave the customer stranded because of the concentration shifts from the client to competition within the company.
Some of the conflicting issues revolve around the pricing strategy, budget allocation, and customer assignments. The promotional aspects may also affect channel conflicts in a negative way. Competition may be healthy when it ensures the scarce resources go into beneficial plans (Thakran and Verma 132). However, the conflicts may cause the management to find amicable solutions that maximize channel performance.
Channel completion may be construed by another to be doing activities that deny one the desired advantage in the market (Lee 412). It may be a competition for resources between channel coalitions or competition for markets. The conflicts may also be those that are just perceived by channel alliances.
Hybrid distribution channels are important to firms. They help build a sales force that is competitive. They also increase customer satisfaction.
Dent, Julian. Distribution Channels. London: Kogan Page, 2011. Print.
Kotler, Philip, and Gary Armstrong. Principles of Marketing. Boston: Pearson Prentice Hall, 2012. Print.
Kotler, Philip. Marketing Management. Toronto: Pearson Canada, 2009. Print.
Lee, Geuk. Convergence and Hybrid Information Technology. Heidelberg: Springer, 2012. Print.
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Lu, Ying, and Junping Xie. “Inventory Decision in Hybrid Distribution Channels Involving Partial Postponement Strategy.” Information Technology J. 12.24 (2013): 8256-8262. Print.
Thakran, K., and R. Verma. “The Emergence of Hybrid Online Distribution Channels in Travel, Tourism and Hospitality.” Cornell Hospitality Quarterly 54.3 (2013): 240-247. Print.